Temporary Equity and Stockholders' Deficiency
|6 Months Ended|
Jun. 30, 2018
|Temporary Equity and Stockholders' Deficiency||
Series B Preferred Stock
The Series B stockholders are entitled to cumulative cash dividends at an annual rate of 8% of the Series B liquidation value (equal to face value of $10 per share), as defined, payable when, as and if declared by the Board of Directors. Cumulative dividends earned by the Series B stockholders were $157,522 and $313,312 for the three and six months ended June 30, 2018, respectively and $48,286 and $51,336 for the three and six months ended June 30, 2017, respectively. During 2018, Company’s Board of Directors declared dividends in the amount of $474,719. During June 2018, the Company issued 378,193 shares of common stock valued at $0.70 per share, or $264,273, in satisfaction of certain dividends payable and paid cash dividends of $127,818. Dividends payable of $82,628 are included in current portion of other liabilities at June 30, 2018. Cumulative unpaid dividends in arrears related to the Series B totaled $157,522 and $284,564 as of June 30, 2018 and December 31, 2017, respectively.
During March 2018, the Company issued 116,284 shares of common stock at $0.70 per share to settle its 2017 obligation, (an aggregate of $81,399) representing the Company’s 401(k) matching contributions to the Company’s 401(k) profit-sharing plan.
During the three months ended June 30, 2018, the Company issued an aggregate of 822,000 shares of common stock at $0.70 per share for cash proceeds of $575,400.
On May 19, 2018, a former employee transferred 46,122 shares of the Company’s common stock to the Company, as payment of a $32,285 receivable from the former employee.
Accumulated Other Comprehensive Income (Loss)
For three and six months ended June 30, 2018, the Company recorded $(909,557) and $(1,195,166), respectively, of foreign currency translation adjustments as accumulated other comprehensive income (loss) and for the three and six months ended June 30, 2017, the Company recorded $(196,492) and $3,768, respectively, of foreign currency translation adjustments as accumulated other comprehensive income (loss), primarily related to fluctuations in the Argentine peso to United States dollar exchange rates.
A summary of warrants activity during the six months ended June 30, 2018 is presented below:
A summary of outstanding and exercisable warrants as of June 30, 2018 is presented below:
On February 12, 2018, the Company granted five-year options for the purchase of 1,304,328 shares of the Company’s common stock under the 2016 Plan, which options for the purchase of common stock were granted to certain employees of the Company. The options had an exercise price of $0.77 per share and vest 25% at the first anniversary of date of grant, with the remaining shares vesting ratably on a quarterly basis over the following three years. The options had an aggregate grant date fair value of $610,985, which will be recognized ratably over the vesting period. The Company has computed the fair value of options granted using the Black-Scholes option pricing model. Assumptions used in applying the Black-Scholes option pricing model are as follows: risk free interest rate of 2.56%, expected term of 5 years, expected volatility of 43.5%, and expected dividends of 0.00%. There were no stock options granted during the three months ended June 30, 2018, or during the three or six months ended June 30, 2017.
During the three and six months ended June 30, 2018, respectively, the Company recorded stock-based compensation expense of $205,111 and $388,331, respectively, and during the three and six months ended June 30, 2017, the Company recorded stock-based compensation expense of $149,597 and $314,127, respectively, related to stock option grants, which is reflected as general and administrative expenses in the accompanying condensed consolidated statements of operations. As of June 30, 2018, there was $1,227,770 of unrecognized stock-based compensation expense related to stock option grants that will be amortized over a weighted average period of 2.8 years, of which $58,416 of unrecognized expense is subject to non-employee mark-to-market adjustments.
A summary of options activity during the six months ended June 30, 2018 is presented below:
The following table presents information related to stock options at June 30, 2018:
The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef